PROJECT: HYDRANTULA INVESTOR MEMORANDUM

2 INVESTOR MEMORANDUM PROJECT NAME: HYDRANTULA EST.2017 FOUNDER: KUCHMA O.V., 1975 STARTUP FROM OCT 2021 PERMANENT 3D NODE-BEAM FORMWORK FOR UNDERWATER CONCRETING. BURNED CASH: 350K USD, FOUNDER ONLY STAGE: MARKET PROMOTION OF SERIES OF PRODUCT [25 MODELS] 1. HYDRANTULA’s Mission: 1. Through innovation, we strive to make marine construction technology, currently used only in oil and gas industry and in large infrastructure projects, accessible to everyone. We want a concrete 3D formwork 100-times smaller than an oil derrick to cost 10,000 times less. 1.2. We strive to develop fool-proof, scalable technology for marine construction that will consistently ensure great results with minimum research and minimum calculations. 1.3. We strive to develop technology for private marine construction that is practical for the DIY market and does not require large initial investment into tools and heavy machinery. 1.4. Over time, we strive to revolutionize the preferences of the middle class. We want everyone to dream not of a seaside home, but of a home rising above water.

3 2. TEAM. 1.2. Like many post-COVID companies, Hydrantula initially prioritized remote work (without any office at all), company management from a phone or a tablet Monday to Sunday in 15 time zones, and driver-seat-management. This allows us to make up for the lost 30% of work productivity that comes with remote work. Surprisingly enough, this team building approach and 7/15 management have proven to be fully effective. • This enables us to bring in talent from less economically developed countries (Georgia, Belarus, Mexico) or regions of Russia (Dagestan). • Freelancers or full-time university students doing odd jobs on weekend or in the evening. • At the same time, it also allows us to find rare specialists (patent specialists, culture experts, translators) from Germany, Moscow, or Singapore. • And most importantly, basically all workers love this practice and gladly employ it to save their time! • It lets us save money on office rent and use workforce “as needed” without any drama or conflict. 2.2. Who forms the core of our team in Vladivostok? • CEO [can’t go without him!] • Accountant • Solidworks product engineer • Multiskilled graphic designer • Polyethylene piping and polyethylene welding specialist. 2.3. Next is a group of employees who we have worked with regularly and for a long time and who spend ¼ - ⅓ of their worktime working for us: • Parser [a programmer who analyzes websites to collect spam address data] (Volgograd) • 3D animator (Batumi - Minsk) • Artificial intelligence and 3D graphics specialist

4 + composer (Batumi). • CATIA product engineer (Hong Kong) • Strength of materials, ice load, and hydrotechnical construction specialist, Rosneft consultant, professor (Vladivostok) • Web developer (Vladivostok) • 3D printing, aluminum casting, and rotomolding specialist (Ryazan). • Thermodynamics and heat transfer specialist (Shanghai) • Patent specialist (Moscow) • Patent specialist (Germany) • Spanish translator (Mexico) • French and German translator (Zurich). • International law specialist, lobbyist, GR specialist (Singapore). • Marketing specialist (Ohio). 3.1 There are several ways of assessing the market size. Based on process or functional similarity (based on the end product): • As a percentage of the plastic formwork market • As a percentage of the hydrotechnical market • As a percentage of the underwater concreting market (tremie). All of the global markets above are approximately $10B per year in size and comprise start-ups or secondary (seed) businesses of large panel formwork manufacturers. The underwater concreting market alone generates approximately $36B per year 3.2 As a percentage of the private pier market + As a percentage of the private ship lift market + As a percentage of the slipway market. + As a percentage of the private seawall market. In the United States, there are approximately six million privately-owned hydrotechnical structures with an average price of ~$50,000 per structure. In 80% of the cases, most of those products 3. MARKET SIZES

6 are traditional wooden structures with a service life of 8-15 years. However, they are increasingly replaced with aluminum, steel, or PVC structures with a service life of up to 25 years. 3.3 With an average estimated service life of 12 years, the American market can be assumed to reach $25B per year. Moreover, the American market also accounts for ~25% of the global private marine construction market targeted by us. 3.4 At the same time, we do not account for American municipal or federal shoreline stabilization programs for erosion and SLR (Sea Level Rise) control, which are estimated to reach $400B by 2040 (we are still far away from American tenders). Nor do we account for traditional marina and yacht club construction, which is at minimum on par with private marine construction and also raises significant investment. For example, a medium-sized marina in Tennessee (Simple Marinas) has recently been sold for the price of over US$100 million. Such projects have a strategic timeline of 3-5 years, and we will be able to widely expand into this market no sooner than 6-8 years after implementing our first projects in the US. 3.5 If we take into account the natural growth of the new hydrotechnical structure market (CAGR 5-8% per year), then the current estimated demand should be doubled. 3.6 Based on all this, Hydrantula’s global target market will amount to $40-150B per year by conservative estimates. 3.7 Notably, the total area of shallows (areas of seas and large lakes with a depth of up to 8 meters) is larger than the area of some countries such as Saudi Arabia or Kazakhstan. For example, the Sea of Azov or the Baltic Sea are 90% shallow. If only 3% of such water area was developed, it would generate material value worth over $90 trillion. Basically, it is the largest undeveloped resource in the world. 3.8 Notably, our technology is considered

7 a Disruptive Innovation, which means our target market is not occupied by large multi-billion competitor companies. It is essentially “empty” - the only competitors in this market are dozens of thousands of construction teams who operate in the same way as their grandfathers 60 years ago. 4. WHY IS HYDRANTULA A DISRUPTIVE INNOVATION? 4.1 The private marine construction market is still dominated by technologies used in Ancient Greece and Medieval Venice: stilts hammered (vibropiled) into soft sea ground and embankments, and foundations from large log crates filled with big rocks (essentially gabions). Obviously, it is impossible to create a stylish brand around hammering wooden or steel stilts. Neither the raw materials (logs), nor the technology employed for this

8 leave any space for patents, know-hows, or price edge. 4.2 One of the more recent technologies of note is steel or PVC Larssen sheet piling. However, even Larssen sheet piling was invented in 1906. Technically, it is just sheets with indentations and locks that can be put together into a seawall. In many cases, it is still cheaper to simply hammer in (or wash) a row of wooden stilts put close together. 4.3 The main characteristics of modern private marine construction are: • Primitive materials (logs or steel pipes). • Structure costs very commonly including machine hours of heavy machinery (that must work continuously for weeks) and qualified labor of excavator operators, crane operators, flatbed drivers, or barge captains. • Large business entry investments (up to $200,000 per team.) • Duration of work being highly dependent on the weather. 95% of all “wet” work is done on-site and above water only. • A lot of raw-material waste due to bottom geology and the impossibility to cut the material perfectly • 50% of water areas having prominent seasonality, rendering winter work impossible. • Construction teams being able to work only within 100-150 km radius from their base. As a result, neighbors will be suffering through unbearable noise and diesel fumes, and the structure will have a short service life and will soon require repairs. 4.4 All these factors make business scaling ineffective, as there is practically no opportunity to save on the size and nothing for the extra workers to do in winter. 4.5 This is how Hydrantula’s technology revolutionizes the workflow for private marine construction: • At least 50% of all operations (and sometimes even up to 90%) are done in a shop.

9 Shops also make it possible to produce semi-manufactured products during winter for storage. • Semi-manufactured and ready-made products can be transported on lowbed trucks across thousands of kilometers. • Most workers can be trained from scratch within a week. They will not need prior heavy machinery certification. • Involvement of heavy machinery is reduced to 1-2 days (or by 5-7 times). • Initial tool investments can be brought down to $5,000 for the team (dealer). • Work at the installation site generate practically no noise. • Service life of Hydrantula structures is up to 60 years. • Wasted material is no more than 10%. At the same time, the structures are one-of-a-kind in appearance. Creating a strong brand is a relatively simple marketing task. The technology is protected by several international patents and trademarked. 5.1 The main factor that determines how the private marine construction market will develop is legal regulation of procedures for acquiring construction permits. Countries with active marine development usually have mature institutes of private ownership of shorelines and long- term lease of water areas. Appropriate procedures are as simple as they can get and have strictly defined decision-making deadlines (generally 45-90 days). However, countries with undeveloped shorelines employ national ownership doctrines for water areas and shorelines. Their use is limited to municipal or process purposes (and exclude recreation or small boat use). Such countries include Russia, China, and Israel. 5.2 Conservationist and populist ideas of “leaving 5. KEY FACTORS THAT DETERMINE MARKET SIZE AND SALES SUCCESS IN VARIOUS JURISDICTIONS:

10 something to future generations” result in entire industries remaining underdeveloped and noncompetitive (industries such as composite manufacturing, shipbuilding and ship repair, tourism, underwater robotics, aquaculture, diving, water sports equipment, ferry service, hotel industry). 5.3 Currently, the demand for comfortable shores and marine recreation is very high across the globe, yet the opportunities for satisfying and monetizing it vary significantly from jurisdiction to jurisdiction. It ranges from picture-perfect Maldivian villas suspended

11 on water to completely empty seashores in North Korea, Iran, Gaza, or Libya. 5.4 Countries with many insular territories (such as Greece, Indonesia, or Sweden) or a river transport monopoly (such as Brazil) generally have exceptions or legal customs for simplified construction of critical insular infrastructure. 5.5 Climate also plays a big role. In countries with long or year-round holiday seasons, investments into marine infrastructure and small boats are recouped much faster, while the infrastructure itself has a longer service life and costs less than infrastructure in countries with short summers and hard winters. 5.6 Countries with developed coastal tourism, exotic diving, and recreational fishing industries, and pristine insular nature (such as the Maldives, Thailand, the Antilles, Bali, Australia, Oceania) get more from marine infrastructure than countries where tourism is based on historic sites and architecture. Countries with a rich history are usually highly conservative when it comes to marine construction and making changes to the waterfront. 5.7 Another essential factor is the level of the population’s wellbeing and whether it has any surplus money for purchasing recreational small boats or water sports equipment. 5.8 The prevalence of seafood in the national cuisine also plays an important role. Countries with centuries-old traditions of coastal fishing (such as Japan, Denmark, Norway, the Netherlands, Vietnam) have large fishing fleets that require infrastructure.

12 5.9 Another key factors are average population density, percentage of developed coastal territory, and the cost of land and real estate on shorelines. 5.10 Other factors that have an effect on the attractiveness of private marine construction include the strictness of environmental and water protection regulations, investment opportunities, quality of the judicial system, corruption level, as well as inherited particularities of the legal system and the population’s general sentiment on justice and the common good. 6. MOST ATTRACTIVE JURISDICTIONS AND WATER AREAS:

13 DOCK/SEAWALL/BOATLILFT MARKET IN THE USA Pros: A relatively liberal legislation allows coastal land owners to develop it and build piers and boatlifts without much problem with legal formalities. The cost of legal permission is a small percentage of the budget for the overall construction. No expensive expert checks or complex projects are required either. Low qualifying requirements for contractors means there are thousands of handymen active in this market. These are small businesses without in-house designers and architects, who build “by eye” and similarly to the previous completed projects. The high level of wellbeing among the population creates a large and solvent demand for scour protection of lots and boat docks. Essentially, this is a market of foremen. For those without ambition or architectural extravagance. For those who only have tried-and-tested solutions.

14 Cons: Generally speaking, lots are already developed and there is no possible way to deploy heavy machinery on them. Construction has to be done on water, from a barge. Expensive workforce leads to overabundance of simple and cheap construction materials, such as wood. This is America’s most favorite material, but it is not as durable when used in water. Both developers and contractors have minimal taste for experiments and innovations. Contractors are lacking in qualification, whereas developers are lacking in vision. This is incentivized by stricter construction laws: what was legal to build before 1979 [wet boat garages, gazebos over water] can now be only repaired, but not renovated or rebuilt anew. As such, “vintage-styled” renovation is a local pastime.

15 7. VALUE OF HYDRANTULA TECHNOLOGY FOR CONSUMERS AND SOCIETY 7.1 In most countries (except for Finland, the East Coast of the US, and some Persian Gulf countries and insular nations in Oceania),the shoreline and the seashore are considered a scarce resource that must be developed only in the interest of society and for some common good rather than in pursuit of solely private interest. Having enough money does not mean being able to develop the shoreline however you wish. And most historically developed coves and marinas regularly become targets of criticism and revisionism from political and environmental activists. 7.2 The value of Hydrantula’s technology is in its ability to double the recreational potential of water areas by preserving the coast in its pristine condition and moving marine structures 25-70 meters further into the sea, including into areas too deep to be suitable for swimming. At the same time, our structures do not hinder normal water circulation and do not cause waterlogging. 7.3 They also make it possible to terraform coves without wide natural sand beaches into terraced beaches and seafronts. 7.4 Hydrantula allows to create marina malls perfect for recreation and retail, not obstacle courses from tetrapods. They are also ideal for collective (cooperative) secure quays for small boats that do not require a special mole (with ramps and ship lifts). 7.5 Additionally, Hydrantula marine structures are easy to dismantle and can be constructed without generating any noise. 7.6 One of the main challenges of shallow water construction is preserving the balance of bottom deposits. Construction of pretty much any continuous structure leads either to the formation (or wash-over) of sand or pebble dunes, or to bottom erosion, which is the exact opposite (and often to both at the same

16 time).As a result, the structure will slowly sink into bottom deposits or its foundation will be exposed and suspended without touching any solid ground. But we managed to find a perfect balance. All this makes Hydrantula a very attractive and socially and environmentally responsible technology for marine construction. 8. VALUE FOR DEALERS, CONTRACTORS, DISTRIBUTORS, ARCHITECTS, AND STORE CHAINS: 8.1 Unlike most alternatives, our products have a bright and memorable design that is one-of-a-kind. A colorful palette reminiscent of M&Ms or LEGO sets us apart from the mass of monochrome (black or white) construction materials, giving us an advantage. 8.2 Unlike the alternatives, most of which were developed in the early to mid-20th century, our technology is brand new and is protected with international patents. 8.3 Unlike most other known methods of marine construction, our structures can be assembled or semi- manufactured up to 60-70% readiness in a shop environment all year round and transported over long distances. Better yet, weather conditions or availability of amenities at the installation site is almost never a problem for us. 8.4 Our formwork has multiple competitive advantages compared to traditional technologies and expands the realms of possibility for private marine construction on a budget. 8.5 A whole range of products in H2, H5, and H6 series simply cannot be implemented with currently existing technologies. 8.6 Our technology does not pollute water with zinc or heavy metal ions, toxic treatment agents, or carcinogenic antifouling solutions.

17 9. MAIN PRODUCTS THAT WE CAN MANUFACTURE. In marine construction, the foundation is the most important and equally the most difficult element of the entire structure. Everything above the wave level (1 meter above the maximum water level as a rule of thumb) is not directly exposed to water and waves and can be built using land [coastal] technologies (accounting for

18 higher humidity, strong wind, and possibly salt fog). Any such superstructure can be repaired and renovated using traditional methods by land construction workers. However, everything below the waterline is exposed to numerous hazards different to those on the shore. Underwater structures are very difficult to repair. They are generally built on the basis of the structure’s entire service life. The purpose for land foundation is to ensure load-bearing capability and prevent frost lift. For underwater foundation at depth (below the water freeze-up level), frost lift is not a problem. As such, the main purpose for underwater foundation is to raise the structure above water, ensure its load-bearing capability, provide wave resistance and prevent bottom soil erosion, as well as provide volume rigidity for the entire structure in extreme cases (ice drift, collisions with floating logs, etc.). Volume rigidity of Hydrantula’s foundation removes the need for a rigid connection to the seabed and makes it possible to distribute the weight of the useful structure via horizontal seabed “skids” on most types of soil. This not only makes construction cheaper, but also makes the hydrotechnical structure relatively easier to dismantle. That said, HYDRANTULA structures can also be anchored to the seabed with screw piles if need be.

19 10. KEY COMPETENCES NECESSARY FOR OUR SUCCESS: 10.1. DIGITAL DEVELOPMENT OF NEW HYDRANTULA FITTINGS, THEIR SYSTEMS, OR FORM ASSEMBLY METHODS. 10.1.1 CAD development and verification of modules for new Hydrantula fittings. Development of laser engravings (tattoos). 10.1.2 Confirmation of the 3D form’s interconnectivity, scalability, and possibility of assembly. Calculation of its estimated rigidity. Estimation of its prime cost per square meter of useful area and mass production viability analysis of the new fitting. 10.1.3 КConversion of the complete 3D model into formats suitable for adjacent work. STEP - for 3D printing of sand casting molds and aluminum casting of formwork matrices. GLB - for 3D visualization, AR/VR, 3D rendering, visuals, and online streams. PRC / PDF3D - for catalogs, labels, and technical documentation. STL - for 3D printing and rotocasting of scale models (1:6) for training purposes, exhibitions, or merch. FBX - for AI (artificial intelligence) systems interface. BLEND - for animation 10.1.4 Development of industrial matrices for rotocasting based on 3D models of the product. Casting, CNC machining, polishing, grain embossing, and laser engraving of the matrices. 10.1.5 Application of watermarks and easter eggs for preventing counterfeits - exact copies of our parts. In 3 years of working in this field, we have found many reliable partners and got sufficient competences and know-how. All our development is done digitally only, without test samples, prototypes, or mistakes. We get a high-quality product on the first try. Assuming the budget is “unlimited”, the whole production process from the idea

20 to the pilot run of a complete matrix, to preparation of documentation for it takes no more than 90 days. Moreover, “metal” matrices can be ordered from practically anywhere around the globe, without the need to transport or import them. 10.2. MARKETING MATERIALS AND DIGITAL ADVERTISING IN THE TARGET MARKET’S MOTHER TONGUE. LOCALIZATION OF MATERIALS TO LOCAL CULTURE AND TRADITIONS. 10.2.1 КHigh-quality translation of existing promotional material (including voiced ads). 10.2.2 Cooperation with local content creators. Adaptation of merch and marketing signals for customary social patterns of the TA. 10.2.3 Participation in exhibitions. 10.2.4 Spam 10.2.5 Search for ambassadors and GR-agents 10.2.6 Webinars and other training tools for dealers and handymen. 10.2.7 Raising awareness of the TA about the product. Communicating brand values and Hydrantula’s mission to the TA. 10.3. BUILDING A FABLESS CHAIN. 10.3.1 The key competency for making a business profitable is being able to build national chains for value creation: ODM manufacturing - Fulfillment - network marketing (online and offline) - Paying agent - QA agent 10.3.2 The main idea of our business strategy is to intentionally avoid developing our own in-house production capacity (outside of an experimental plant for testing samples and test runs) in all primary markets. Instead we plan to produce duplicates of most popular matrix models and make them available for existing (third-party) rotomolding facilities close to our target markets. 10.3.3 Our own personnel will only handle sales and promotion of the Hydrantula brand and technology.